Judge James C. Chalfant, Case Number: 21STCP02300, Date: 2024-10-15 Tentative Ruling

Farhad Nowzari, M.D. v. Torrance Memorial Medical Center Health Care Foundation, et al., 21STCP02300
Tentative decision on motion for attorney’s fees: granted

Respondents Memorial Medical Center (“Torrance”), erroneously sued as Board of Trustees of Torrance (“Board”); and its Medical Staff, erroneously sued as the Medical Executive Committee of the Medical Staff of Hospital (“MEC”), move for an award of $84,892.57 in attorney fees and costs on appeal, and for the instant fee motion, from Petitioner Farhad Nowzari (“Nowzari”).

The court has read and considered the moving papers, opposition, and reply, and renders the following tentative decision.

Petitioner Nowzari commenced this proceeding on July 16, 2021, alleging causes of action for traditional and administrative mandamus and seeking injunctive relief against Board, MEC, Torrance Health Care Foundation (“Hospital”), and Torrance Memorial Integrated Physicians, LLC (“Integrated Physicians”). The verified Petition alleges in pertinent part as follows.

Hospital’s medical staff referred three cases of patient deaths following surgery for peer review to Nowzari’s former partner Dr. Garrett Matsunaga (“Matsunaga”). Matsunaga was the Hospital’s Chief of Urology. Although Matsunaga recognized the appearance of impropriety in reviewing his former partner’s work, he insisted on doing it anyway. Matsunaga reviewed the three cases, consisting of 3000 pages, in only 1.5 hours and concluded that the deaths were due to Nowzari’s negligence and poor judgment. According to Matsunaga, Nowzari suddenly had become a danger to patient safety if allowed to remain on staff.

To avoid the appearance of bias, Matsunaga then selected Dr. Stratton to serve as pro tempore chair of the Urology Surgery Subcommittee (“Urology Subcommittee”, sometimes “Subcommittee”). Timothy Lesser, M.D. (“Lesser”), a doctor who reported Nowzari, and Matsunaga were present at the Urology subcommittee meeting, and they led the interrogation of Nowzari about the three cases without advising him of the issues or giving him an opportunity to prepare.

The medical staff’s lawyer, John Harwell, Esq. (“Harwell”), selected a reviewer, Thomas Rosenthal, M.D. (“Rosenthal”), and informed him of the opinion reached by the Urology subcommittee and its characterization of Nowzari as reckless and dangerous. Rosenthal was provided a select set of records to review, which he used to recommend that the Hospital medical staff suspend Nowzari’s privileges.

The MEC considered the matter on August 22, 2018. At this point, Nowzari hired legal counsel and obtained an outside review from urologist Soroush Ramin, M.D. (“Ramin”) who could not find a credible basis for the criticisms. The MEC withdrew the summary suspension and proposed a complete competency evaluation done by the Physician Assessment and Clinical Education (“PACE”) program at the University of California, San Diego. Nowzari also could only assist in surgeries, and hospital consultations would require another practitioner as the primary physician.

On August 24, 2018, the MEC modified the summary suspension of Nowzari’s privileges. MEC restricted Nowzari’s clinical privileges to assisting in surgery and providing inpatient consultations, both of which would require co-management by another urologist. Nowzari was recommended to the PACE program for assessment of competency.

On September 19, 2018, Nowzari demanded a hearing from the MEC decision. James Lahana, Esq. (“Lahana”) was selected as the neutral arbitrator but made no disclosures regarding any past dealings or connections that may invoke a perception of partiality. Lahana’s decision is tainted with the appearance of impropriety.

On February 20, 2019, PACE issued its report to the MEC and not Nowzari, even though he paid half the costs. PACE concluded that Nowzari is competent but observed that Nowzari’s performance on Microcog cognitive screening evaluation indicated a need for further psychological evaluation. PACE issued a category 3 classification of competency.

On March 29, 2019, the MEC accepted PACE’s recommendations. On May 16, 2019, PACE issued an amended report stating that Nowzari met the criteria for a higher competency classification of 2.

In December 2019, Nowzari turned in a neurocognitive/fitness-for-duty assessment from his own professional which stated that he is a competent, skillful, and well-qualified urologist fit to practice his profession. Respondents refused to accept the report.

On March 2, 2021, Lahana issued his decision and found that the MEC’s actions were warranted and necessary. The decision largely adopted the MEC’s position without addressing many of the factual issues or evidence to the contrary.

Nowzari appealed the decision to the Hospital’s Board. On June 16, 2021, the Board issued its decision, finding substantial evidence supported the arbitrator’s determination. The decision marginalizes or ignores the compelling facts, evidence, and injustice.

On July 21, 2021, Nowzari served the Petition, Summons, and moving papers on Respondent Integrated Physicians by substitute service. He served Respondent Hospital by substituted service on July 26, 2021 and served Respondents MEC and Board by substituted service on July 28, 2021.

On September 10, 2021, Respondents Board and MEC filed an Answer. They filed another Answer on November 29, 2021.

On September 30, 2021, Respondents Hospital and Integrated Physicians filed a demurrer with a motion to strike. Respondents Hospital and Integrated Physicians subsequently withdrew the demurrer. On December 9, 2021, Nowzari filed a request for dismissal without prejudice for Hospital and Integrated Physicians. The court entered dismissal on December 13, 2021.

On May 26, 2022, the court denied the Petition. Judgement was entered on June 10, 2022.

On May 2, 2024, the court of appeals affirmed this court’s decisions denying the Petition and awarding attorney fees.

“[A]s a general rule, attorney fees are not recoverable as costs unless they are authorized by statute or agreement.” People ex rel. Dept. of Corporations v. Speedee Oil Change Systems, Inc., (2007) 147 Cal.App.4th 424, 429.

Per Business and Professions Code (“B&P Code”) section 805(b)(2) and (b)(3), the chief of staff of a medical or professional staff or other chief executive officer, medical director, or administrator of any peer review body and the chief executive officer or administrator of any licensed health care facility or clinic shall file a report (“805 report”) with the relevant agency within 15 days after the effective date of (1) the termination or revocation of a licentiate’s membership, staff privileges, or employment; or (2) any new restrictions on staff privileges, membership, or employment for a cumulative total of 30 days or more for any 12-month period, for a medical disciplinary cause or reason. B&P Code §§ 805(b)(2), 805(b)(3).

In any suit brought to challenge an action thereby taken or a restriction thereby imposed, the court shall award to a substantially prevailing party the cost of the suit, including a reasonable attorney’s fee, if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith. B&P Code §809.9. A defendant has not substantially prevailed if the plaintiff obtains an award for damages or permanent injunctive or declaratory relief. Id. A plaintiff has not substantially prevailed if the plaintiff does not obtain such an award. Id. The use of the word “shall” indicates that the award is mandatory. Smith v. Selma Comm. Hosp. (“Smith”) (2010) 188 Cal.App.4th 1, 7, 26.

“Frivolous,” “unreasonable,” “without foundation,” and “bad faith” are separate grounds for an award of fees. Id. at 29-30. There is partial overlap between the terms “without foundation” and “unreasonable” such that a party's litigation conduct may qualify as both. Id. at 33.

“Without foundation” means “baseless, groundless, or without support.” Id. at 30-31. The foundation for an assertion of fact is evidence, whereas the foundation for a contention of law is legal authority. Id. at 31. The record of the proceeding will contain a party's (1) factual assertions and references to the evidence that supports those assertions and (2) legal positions and the authority cited to support those positions. Id. at 31. Based on the nature of the inquiry and the record available, the existence of supporting evidence and authority can be determined as a matter of objective fact. Id. at 31.

To determine if a plaintiff’s conduct was “reasonable” under B&P Code section 809.9, the court should ask whether any reasonable attorney would have thought the claim tenable based on the facts the plaintiff knew when they filed or maintained the action. Id. at 32-33. Whether a party’s conduct in litigating the suit is reasonable depends in part on the positions it took during the litigation. Id. at 26. “[C]onduct in litigating the suit” includes acts taken on specific issues and motions. Id. at 29.

The prevailing party bears the burden of proof as to the reasonableness of any fee claim. CCP §1033.5(c)(5). This burden requires competent evidence as to the nature and value of the services rendered. Martino v. Denevi, (1986) 182 Cal.App.3d 553, 559. “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” Id. “‘The reasonable market value of the attorney's services is the measure of a reasonable hourly rate. This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represent the client on a straight contingent fee basis, or are in-house counsel.’” Center For Biological Diversity v. County of San Bernardino, (2010) 188 Cal.App.4th 603, 619 (citations omitted).

In determining whether the requested attorney’s fees are reasonable, the court’s “first step involves the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer’s hourly rate. The lodestar figure may then be adjusted, based on consideration of facts specific to the case, in order to fix the fee at the fair market value for the legal services provided.” Gorman v. Tassajara Development Corp., (2008) 162 Cal.App.4th 770, 774 (“Gorman”). In adjusting the lodestar figure, the court may consider the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case. EnPalm LLC v. Teitler, (2008) 162 Cal.App.4th 770, 774; see also PLCM Group, Inc. v. Drexler, (2000) 22 Cal.4th 1084, 1095.

Nowzari brought this lawsuit against Torrance and MEC. Pedroza Decl., ¶2. Cole Pedroza LLP (the “Firm”) was retained to represent Respondents against Nowzari’s claims, including through appeal. Pedroza Decl., ¶2. Respondents agreed to pay the Firm’s professional fees and costs, as billed, and in fact has caused those fees to be paid. Pedroza Decl., ¶3. Cassidy Davenport, Esq. (“Davenport”) and Kenneth Pedroza, Esq. (“Pedroza”) were the attorneys responsible for the representation of Respondents. Pedroza Decl., ¶4.

Pedroza is a graduate of Stanford University and of the University of Arizona College of Law. Pedroza Decl., ¶5. He has been practicing law in Los Angeles, California since 1996. Pedroza Decl., ¶5. From 1996 to 2000, Pedroza was an associate at the law firm of Breidenbach, Buckley, Huchting, Halm & Hamblet. Pedroza Decl., ¶5. From 2000 to 2006, he was an associate and then partner at the law firm Thelen Reid & Priest, formerly Thelen Marrin Johnson & Bridges. Pedroza Decl., ¶5.

Since 2006, Pedroza has been a founding and named partner of Cole Pedroza LLP. Pedroza Decl., ¶5. For the last 17 years, he has also been certified as an appellate specialist by the State Bar of California, Board of Legal Specialization. Pedroza Decl., ¶5. His legal experience includes in excess of 100 decisions from state and federal appeals or writ proceedings, in addition to over 20 civil and criminal jury trials, court trials, and arbitration hearings. Pedroza Decl., ¶5. Pedroza has argued numerous times in the California Supreme Court. Pedroza Decl., ¶5. His time in this case was billed at a reduced rate of $475 per hour. Pedroza Decl., ¶5.

Davenport graduated from Arizona State University, College of Law. Pedroza Decl., ¶6. Since 2008, Davenport has been an associate and then partner at Cole Pedroza LLP. Pedroza Decl., ¶6. Since 2014, she has been certified as an appellate specialist by the State Bar of California, Board of Legal Specialization. Pedroza Decl., ¶6. Davenport has developed a particular proficiency in state appeals and writs. Pedroza Decl., ¶6. Many of her appellate matters have resulted in favorable published decisions. Pedroza Decl., ¶6. Davenport’s time in this case was billed at a reduced rate of $475 per hour. Pedroza Decl., ¶6.

Matthew Levinson, Esq. (“Levinson”) graduated from Cornell University in 1991 and from UCLA School of Law in 1994. Pedroza Decl., ¶7. He is certified as an appellate specialist by the State Bar of California, Board of Legal Specialization. Pedroza Decl., ¶7. From 1994 to 1999 he was an associate at the law firm Thelen Reid & Priest, formerly Thelen Marrin Johnson Bridges. Pedroza Decl., ¶7. He has been an associate at Cole Pedroza LLP since its inception in 2006 and has been a partner at the Firm since 2012. Pedroza Decl., ¶7. Levinson’s time in this case is billed at the reduced rate of $475 per hour. Pedroza Decl., ¶7.

Nayri Jilizian, Esq. (“Jilizian”) graduated from the University of Southern California and Southwestern Law School. Pedroza Decl., ¶8. She has practiced law since 2012 and has been an associate at Cole Pedroza LLP since 2022. Pedroza Decl., ¶8. Jilizian’s time in this case is billed at the reduced rate of $390 per hour. Pedroza Decl., ¶8.

The Firm bills clients for its attorneys’ time at an hourly rate, in increments of one-tenth of an hour. Pedroza Decl., ¶9. It also bills clients for costs it incurs on their behalf. Pedroza Decl., ¶9. It is the Firm’s practice that each timekeeper working on a matter makes a daily time record of the tasks he or she performs, including a narrative of the work performed and the time expended thereon. Pedroza Decl., ¶10. The time records are made at or near the time of the acts, conditions, or events described therein. Costs incurred on behalf of clients are also recorded in the regular course of business at or near the time the costs are incurred. Pedroza Decl., ¶10. The time records and cost records are then incorporated into billing statements, which are generated and sent to clients monthly. Pedroza Decl., ¶11. The billing statements reflect the amount of fees and costs incurred by clients, in addition to the narratives of each timekeeper’s work. Pedroza Decl., ¶12.

Respondents incurred $74,618.57 in fees in defending against Nowzari’s claims on appeal. Pedroza Decl., ¶15, Ex. E. This time began as of June, 2022, after the first fee award in this matter. Pedroza Decl., ¶15. Those fees include: (1) review and assessment of the appellate record; (2) review and assessment of Nowzari’s opening brief; (3) miscellaneous tasks, research and strategy for Respondents’ brief and the answer to Nowzari’s petition for review to the California Supreme Court; (4) research, preparation and filing of proposed judgment, supplemental motion for attorney’s fees, Respondents’ brief on appeal and answer to the petition for review; (5) preparation for and attendance at oral argument; (6) review and assessment of the appellate opinion; (7) review and assessment of the petition for rehearing filed by Nowzari and review and assessment of Nowzari’s petition for review; and (8) review, research, and drafting the answer to the petition for review. Pedroza Decl., ¶15.

Respondents incurred $6,474 in fees in drafting this motion for attorneys’ fees on appeal after Nowzari was unwilling to pay the Firm’s fees without such a motion. Pedroza Decl., ¶16. The Firm anticipates an additional five hours to prepare a reply and three hours to prepare for and appear at the hearing on the instant motion. Davenport Decl., ¶12. At Davenport’s $475 per hour rate, these additional eight hours constitute $3800 in fees. The total for the fee motion is $10,274.

Based on his experience in litigation and participation in this case, Pedroza concludes that: (a) the tasks performed were reasonable and necessary to the representation of Respondents in the appeal and petition for review; (b) the time spent on those tasks was reasonable and necessary; and (c) the hourly rates charged were reasonable and necessary. Pedroza Decl., ¶19.

Respondents Torrance and MEC move for an award of $74,618.57 in attorney fees on appeal, amended appeal costs of $1,072.30 (Suppl. Davenport Decl., ¶3), and $10,274 for the instant fee motion, a total of $85,964.87.

In awarding attorney fees for the trial proceeding, the court noted that B&P Code section 809.9 provides that the court shall award attorney’s fees to a substantially prevailing party “if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith.” There was no question that the MEC is the prevailing party and that Nowzari’s conduct in litigating the case lacked foundation and was unreasonable on the principal ground raised (the ex parte issue), as well as on the substantial evidence issue. At most, Nowzari raised the arbitrator disclosure issue without any legal analysis. Nothing in the statute prevented the court from parsing attorney’s fees on issues that lacked foundation from those that had a foundation. Giving Nowzari the benefit of the doubt to avoid a chilling effect, the court awarded MEC two-thirds of the requested $71,270.50, or $47,513.67.

The Court of Appeal affirmed the judgment, holding that the denial of the Petition as well as the fee award were appropriate. Davenport Decl., Ex. B. The appellate court deferred to this court for an award of attorney fees on appeal. Ex. B, p. 20, n.10.

Nowzari argues that Respondents made no showing or argument on appeal that Nowzari’s appeal – as opposed to his trial court proceeding – was frivolous, unreasonable, without foundation, or in bad faith. The appellate court made no such finding either, awarding only costs on appeal. He poses the question: Why were fees not requested, or ordered by the appellate court, as a matter of right on remand along with the other costs of appeal? Opp. at 8-9, 14.

Respondents correctly note (Mot. at 5-6) that a trial court’s attorney fee award, whether awarded by contract or statute, includes attorney fees on appeal. Morcos v. Board of Retirement, (“Marcos”) (1990) 51 Cal.3d 924, 927. B&P Code section 809.9 does not preclude an award of attorney fees on appeal and Respondents are entitled to recover them.

Nowzari attempts to distinguish Marcos as a case where the California Supreme Court interpreted the statute at issue, Govt. Code section 31536, as enacted to place the government and pensioners on a level playing field and argues that B&P Code section 809.9 is a penalty statute that does not justify simply awarding attorney fees on appeal. Opp. at 15. To conclude otherwise would chill physicians from pursuing review of peer review decisions. That is why Respondents did not seek, and the appellate court did not award, attorney fees on appeal. Opp. at 16.

Nowzari ignores the fact that this court found that his conduct in litigating the case lacked foundation and was unreasonable on the principal ground raised (the ex parte issue), as well as on the substantial evidence issue. B&P Code §809.9. The appellate court upheld this finding. Under Marcos, a trial court’s award of attorney fees by statute, includes attorney fees on appeal. 51 Cal.3d at 927. No finding of a frivolous appeal need be made to include attorney fees on appeal in this award.

Respondents are entitled to their appeal attorney fees incurred in defending against Nowzari’s claims which lacked foundation and were unreasonable.

Respondents’ burden requires competent evidence as to the nature and value of the services rendered. Martino v. Denevi, (1986) 182 Cal.App.3d 553, 559. “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” Id.

“In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” Lunada Biomedical v. Nunez, (2014) 230 Cal.App.4th 459, 488.

Nowzari does not challenge the rates charged by the Firm. He notes that the court retains discretion to discount block billing when the practice prevents opposition from ascertaining what tasks are not compensable. Heritage Pacific Financial v. Monroy, (2013) 215 Cal.App.4^th 972, 1010. Nowzari notes that Respondents cryptically offer the declarations of Pedroza and Davenport for six appeal matters and two fee motion matters. He questions the combination of the appellate court and superior court time and argues that the categories reflect duplicate time and time for an answer not requested by the California Supreme Court. He notes that the Firm seeks 32 hours to prepare for appellate argument and then read the appeal decision. Finally, he argues that this court only awarded 2/3 of the requested fees and the appellate court confirmed that the did have a foundation for that portion. Opp. at 18-21.

As with the initial fee motion, the court has discretion to discount fees based on the fact that the moving party block bills. Respondents’ counsel’s block billing summary breaks down the hours claimed into six tasks, and it shows the total amount of work that each attorney or paralegal performed. Pedroza Decl., Ex. E. While the MEC could have been more specific, there is nothing wrong with block billing per se. The court finds the hours incurred, and the resulting $74,618.57 in attorney fees on appeal, to be reasonable. It seems plain that the Firm spent most of the identified 32 hours preparing for appellate argument, not reading the appeal decision. There is no basis to reduce the award by 1/3 as Nowzari fails to show that he prevailed on any appeal issue.

Prior to filing the fee motion, Respondents’ counsel attempted to resolve the issue. Those efforts were unsuccessful, and Respondents’ request for an additional $10,274 for this motion, the reply, and to attend the hearing is reasonable. Davenport Decl., ¶12. Nowzari does not dispute the amended costs of $1,072.30.

The motion for an additional $85,964.87 in attorney fees and costs on appeal, and for the instant fee motion, is granted.